SSS wants first choice on PPP financing

By Prinz Magtulis (The Philippine Star), November 18, 2016

MANILA, Philippines – The Social Security System (SSS) now wants to have a first say on financing part of public private partnership (PPP) projects to be bid out by the government.

“We plan to make it compulsory for PPP proponents to reserve for SSS the right of first refusal to 25 percent equity participation,” SSS chair Amado Valdez said in a statement yesterday.

This, in effect, will require the government to first seek SSS help in funding part of infrastructure projects before going elsewhere.

This, in turn, will help finance planned pension increases, particularly the P2,000 adjustment pending before Congress. The PPP Center declined to comment.

Sought for details, SSS assistant vice-president Maria Luisa Sebastian said the proposal would be contained in a bill to amend the pension fund’s charter, which is yet to be crafted.

“Those are still ideas being floated by the new chair,” Sebastian said in a phone interview.

Earlier, Valdez said he wanted all future toll roads to be partly constructed using SSS funds since fees collected from their operations would represent consistent flow of funds for the agency.

From January to September, 39 percent or P180.46 billion of SSS investment portfolio was invested in government securities.

Around 24 percent or P111.22 billion was invested in equities, 18 percent (P85.93 billion) in member loans, eight percent (P38.66 billion) in corporate notes, seven percent (P33.82 billion) in bank deposits and four percent (P20.05 billion) in property.

That represented the bulk of investments since Sebastian said its charter prohibits it to invest too much on other assets, which could generate bigger earnings.

“Investing in infrastructure also has a multiplier effect which can boost national economic growth,” Valdez said.

“Having better roads in terms of quality and reach helps promote local tourism and commerce,” he said.

But actually under RA 8282, nothing prevents SSS from investing up to 30 percent of its investment funds on infrastructure and currently, it does not have such placement.

The law also caps investments in other areas, including up to 40 percent in government securities, 30 percent in real estate, 10 percent in member loans and 7.5 percent in foreign currency-denominated assets.

“Finding more ways to further improve SSS financial viability and giving more meaningful benefits are among the reforms we plan to pursue under the current administration,” Valdez said.

“Generating revenues from innovative investments is one of the options we intend to take…,” he said.